NEW YORK CITY -- New York's "Hometown" paper, the New York Daily News, featured a story on Dec. 3 about SEIU CU member Onika Shepherd, who remembered how well her credit union treated her when she was in college and got a car loan. CUs were all about auto loans, right?
Wrong, found Shepherd, now married with a toddler. The CU member had saved for a down payment and grew frustrated when a mortgage broker offered her a high-interest home loan. "It made my head spin," said Shepherd, 29, who earns $46,000 a year as a membership organizer for Local 1199 of the Service Employees International Union. A colleague suggested she try SEIU's credit union, according to the story by Lore Croghan. Shepherd found a home in South Ozone Park, Queens, "with rose bushes in the front yard and parking spaces in the back."
"As the subprime mortgage crisis deepens, old-fashioned credit unions are gaining popularity with homebuyers. These nonprofit financial institutions use members' deposits to fund mortgages. Borrowers are members," goes the story. That's no surprise to those already familiar with CUs, of course, but the rest of the world is still in discovery mode.
"We've never made subprime loans," insisted Anie Akpe-Lewis, manager of the mortgage department at the Municipal Credit Union in lower Manhattan, also cited in the piece. William Mellin, CEO of the New York State Credit Union League was also quoted saying, "Half the state's 499 credit unions offer home loans, and all take a conservative approach. None offer interest-only adjustable rate mortgages, negative-amortization adjustables or mortgages with low but short-term teaser rates." Mellin expects the number of credit union members, now 4.2 million statewide, to grow next year as more people join, intent on applying for a mortgage.